Eaton (ETN) to Report Q3 Earnings: What’s in the Offing?

Eaton Corporation ETN is scheduled to release third-quarter 2023 earnings on Oct 31, before the opening bell. The power management company delivered an earnings surprise of 2.96% in the trailing four quarters, on average.

Let’s discuss the factors that are likely to be reflected in the upcoming quarterly results.

Factors to Note

Eaton’s widespread operations and the strong performance of its organic assets are expected to have boosted earnings in the quarter. Megatrends and re-industrialization are driving large increases in capital investments and creating opportunities in most of Eaton’s end markets. This is expected to have had a positive impact on earnings.

Increased defense spending due to global conflicts and governments allocating more dollars to procure equipment manufactured by Eaton to improve fleet readiness is likely to have boosted third-quarter earnings.

Eaton’s third-quarter earnings are expected to have been impacted by increased corporate expenses, which is likely to have offset some positives in the quarter.

Expectations

Eaton expects third-quarter earnings in the range of $2.27-$2.37 per share. It anticipates organic revenue growth of 9-11%. The segmental operating margin is expected to be 17.5-18.5% for the quarter. The Zacks Consensus Estimate for third-quarter earnings is pegged at $2.34 per share, indicating an improvement of 15.84% from the prior-year reported figure.

What Our Quantitative Model Predicts

Our proven model does not conclusively predict an earnings beat for Eaton this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here, as you will see below.

Eaton Corporation, PLC Price and EPS Surprise

Eaton Corporation, PLC price-eps-surprise | Eaton Corporation, PLC Quote

Earnings ESP: Eaton has an Earnings ESP of -0.83%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Currently, Eaton carries a Zacks Rank #3.

Stocks to Consider

Investors can consider the following players from the same sector that have the right combination of elements to beat on earnings in the upcoming release.

LegalZoom.com, Inc. LZ is likely to come up with an earnings beat when it reports third-quarter 2023 results on Nov 7. It currently has an Earnings ESP of +17.65% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

LegalZoom’s long-term (three- to five-year) earnings growth is projected at 55.74%. The Zacks Consensus Estimate for LZ’s 2023 earnings per share indicates an increase of 8.8% in the last 60 days.

Stanley Black & Decker SWK is likely to come up with an earnings beat when it reports third-quarter 2023 results on Oct 27. It has an Earnings ESP of +1.84% and a Zacks Rank #2 at present.

SWK’s long-term earnings growth is projected at 11.5%. The Zacks Consensus Estimate for SWK’s 2023 earnings per share indicates an increase of 4% in the last 60 days.

Emerson EMR is likely to come up with an earnings beat when it reports fourth-quarter fiscal 2023 on Nov 7. It has an Earnings ESP of +0.02% and a Zacks Rank #2 at present.

Emerson’s long-term earnings growth is projected at 11.9%. The Zacks Consensus Estimate for EMR’s fiscal 2023 earnings per share indicates an increase of 0.9% in the last 60 days.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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